The claimant church was a private company limited by guarantee and a registered charity. The defendants owned premises which were leased to the claimant, which had subsequently spent about £850,000 on refurbishments, including a new roof. The church wanted to convert its lease into a freehold.
The Places of Worship (Enfranchisement) Act 1920 provides, so far as is relevant:
1(1) Where premises held under a lease … are held upon trust to be used for the purposes of a place of worship … the trustees … shall have the right as incident to their leasehold interest to enlarge that interest into a fee simple, and for that purpose to acquire the freehold and all intermediate reversions.
It was not disputed that the church did not hold its assets on trust in the strict sense: it was the beneficial owner of its assets. But the church was required to comply with its charitable objects, and its members did not have rights to its assets or funds. Interpreting the 1920 Act as limited to trusts in the strict sense would not best give effect to its purpose as discerned from the legislation, creating ‘an apparently irrational distinction’ between religious bodies that had chosen to incorporate and those that had not.
Though there was nothing in the church's memorandum or articles expressly relating to the premises or their use, its objects clearly included the advancement of the Christian faith. The lease authorised the use of the premises ‘as a church and community centre with ancillary offices’, any other purpose requiring the landlord's consent. Taking the memorandum and articles of the church and the authorised use under the lease, the requirements of section 1(1) of the 1920 Act were met. The church was therefore entitled to a declaration that it had the right to acquire the freehold of the premises pursuant to the 1920 Act.
The court observed that ‘It is fair to say that the 1920 Act is a little encountered piece of legislation, with just one known contested High Court case, Stradling v Higgins [1932] Ch 143.’ [Frank Cranmer]